Urea is rising all the way

Up to now, the overall progress of spring fertilizer market has been sweeping from north to south. Generally speaking, there is no big gap between the demand of fertilizer in the lower reaches of most areas in this spring and the quantity level in previous years. The market peak season lags behind and is short, but the price is relatively high. Nowadays, the fertilizer market has officially begun in summer. Although enterprises have already carried out pre-collection activities, the enthusiasm of downstream payment is not high, and cautious wait-and-see is still dominant.

Apart from the fact that fertilizer prices are too high and crop prices are too low in previous years, another major reason for the slow downstream pickup is the frequent fluctuation of urea prices. Following the weakening of prices, urea prices in Shandong and Lianghe have warmed up slightly since last weekend, but in the absence of a significant positive domestic and international market, whether this round of small price increases can be sustained or not Despite the fact that it is unknown, the impact on finished fertilizers such as water-soluble fertilizers has been apparent.

Firstly, preferential policies should be adjusted. In order to seize the market share, most water-soluble fertilizer enterprises have a certain degree of preferential trade in products, generally more than 100 yuan/ton, or contain the corresponding rebate policy. The change of raw material market also makes the cost of water-soluble fertilizer fluctuate up and down. The enterprise will naturally adjust the sales plan. The main price of water-soluble fertilizer itself is relatively high. If the quotation of the factory is adjusted slightly, the effect is not very obvious. Once the big move is taken, it will certainly affect the enthusiasm of downstream delivery. Therefore, the change of preferential policy can not only meet the synthetic cost. The ups and downs, and will not restrain the release of downstream demand too much, can be regarded as “one kill two birds with one stone”.

Secondly, the trading climate has weakened. Unlike usual, after the end of winter water-soluble fertilizer peak season, the demand of spring, summer and autumn has improved, successfully occupying part of the traditional fertilizer market. Since the fluctuation of urea market, the atmosphere of local water-soluble fertilizer trading has weakened. The first reason is that downstream enterprises are worried about adjusting prices and waiting patiently for the future market to be clear. The second reason is that the period of concentration of demand in spring is coming to an end, and the demand in summer is still sometime too early to reserve goods. It is likely to miss the profit opportunities, even form the inversion of prices. Water-soluble fertilizer market or with the overall fertilizer market into a short period of rest, in preparation for summer sales.

Finally, the start-up rate decreased slightly. Not long ago, the explosion of Yancheng Chemical Plant in Jiangsu did give people a warning. Many chemical parks have carried out a major inspection of production safety. Fertilizer production enterprises are inevitably affected, and the production situation has been relatively depressed. Urea market changes rapidly, increasing downstream sentiment, demand is restrained, water-soluble fertilizer enterprises orders become worse, due to inventory pressure, some enterprises can only take the initiative to reduce the start-up rate, try to maintain the balance of production and marketing; in addition, as mentioned above, the spring demand season is coming to an end, the gradual reduction of orders is also an important reason for reducing the start-up rate, therefore, water in the short term. Fertilizer enterprises will control production according to the order situation.

In summary, urea has been rising and falling all the way, bringing suspense to the development of fertilizer market at all stages, but it has to be said that good urea support for finished fertilizer is very strong. Once the price of urea does not fall significantly during the summer fertilizer period, the market of finished fertilizer will also be stable.